Court: Alta Mesa, Kingfisher buyer can’t terminate purchase agreement

By Caroline Salls

Pittsburgh, March 12 – Alta Mesa Resources, Inc. and Kingfisher Midstream, LLC asset purchaser BCE-Mach III LLC cannot terminate its asset purchase agreement obligations at this time, according to an order filed Thursday with the U.S. Bankruptcy Court for the Southern District of Texas.

Specifically, judge Marvin Isgur said in his order that “BCE-Mach III LLC may not terminate its obligations arising under the purchase and sale agreements under sections 14.1 or 14.2 of the purchase and sale agreements based on any fact in existence as of 9:54 a.m. on March 12, 2020.”

The order said any termination notice delivered by any party to the sale agreement will only take effect if it is confirmed by a court order.

In addition, the order allows the Alta Mesa and Kingfisher debtors to conduct a marketing process for any of the assets and businesses covered by the purchase and sale agreements without that process constituting a breach of the agreements.

As previously reported, Alta Mesa filed a motion on Tuesday asking the court to enforce sale orders and purchase and sale agreements and award fees and expenses incurred by its estates as a result of a delayed closing.

Despite agreeing to a Feb. 12 target closing date for the assets of the Alta Mesa and Kingfisher Midstream debtors, the company said purchaser BCE-Mach III still has not closed the sale.

“The buyer negotiated for milestones in the PSAs that put the debtors on a fast track to auction and sale approval,” the motion said.

“Then, once the court’s sale order was in hand, the buyer seemingly ‘put the brakes on’ the entire process in direct breach of the PSAs’ terms.”

Alta Mesa said BCE-Mach said on Tuesday, nearly one month after the target closing date and six weeks since the court’s sale order, that it no longer believes it will be able to obtain all of the financing to complete the sale and needs to obtain alternative financing.

However, the company said the buyer does not have a “financing out,” and the longer the closing is delayed, the more fees and expenses are being incurred by Alta Mesa.

Alta Mesa is an onshore oil and gas company based in Houston. It filed for bankruptcy on Sept. 11, 2019. The Chapter 11 case number is 19-35133.

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